Thursday, October 24, 2013

Neo-Feudalism: Carlyle Group to Buy Trailer Parks

In the FED's ZIRP world, where does someone go to earn a steady return? ZIRP has pushed safe bond yields down to generational lows, the equity markets have been bid up, and even traditional real estate has seen a flood of cash buyers buying to rent for measly returns compared to yesteryear. The 1% have to look for alternative investments. They have to bid on assets they formerly would've turned down. The private equity firm the Carlyle Group is moving in a bold new direction and buying trailer parks.

The Carlyle Group will invest in trailer parks because they offer stable returns due to their high occupancy rates and their steady monthly lot fees. The sick genius of it all is in the quote from another trailer park owner,
"Our customers have no alternative shot at home ownership, nor do they normally even have the credit scores and quality to seek anything better. They never leave the park they are in, and the revenues are unbelievably stable as a result". 
The 1% are repeating a mistake they made with subprime, but now with the rental market. They bought good mortgages, then not as good, then awful mortgages and 2nd and 3rd liens. In the post-crash ZIRP era, they have moved from good rental quality REITs to buying homes directly and renting them to buying tons of foreclosed homes in dodgier areas and trying to build their own REIT to buying trailer parks. Yields get squashed, and they just move down in quality to chase the same yield. God forbid anyone put their money to productive uses. Besides being hooked up with the Bush family, the Carlyle Group has Arab money and is a heavy donor to our political system. The Carlyle Group also is the majority owner of Booz Allen Hamilton, which spies on all of us for our safety.

In short, a private equity firm that is a top contributor to our political machine, reaping huge returns for their owners (including foreign billionaires) in a time where everyone not a millionaire's income is slipping suddenly is buying trailer parks full of the poor because they have nowhere else to go and will not leave. These same poor people are most likely voters who will in turn vote for more government, which the Carlyle Group has a hand in controlling and administering. The poor are not expected to move or go anywhere, but as long as they pay their lot fees and vote for more military spending, all is well. In days of yore, this was called feudalism, but we call it progress. The vote is the watered down 21st century feudal oath.

1 comment:

peterike said...

People lose their jobs to globalization and endless immigration, move to trailer parks and live on government subsidies.

Carlyle Group buys into trailer parks as an investment.

Powers That Be continue to print endless reams of money to give to people who.... live in trailer parks and transfer the government money to the Carlyle Group.

What, you see something wrong with this arrangement?